This technical note outlines the key tax changes and, incentive scheme enhancements, and transfer pricing developments arising from Singapore\u2019s Budget 2026.<\/p>\n
There are no changes to the prevailing tax rates:<\/p>\n
Corporate Income Tax (CIT):<\/strong> 17%<\/p>\n<\/li>\n Personal Income Tax:<\/strong> Top marginal rate of 24% on chargeable income above S$1 million<\/p>\n<\/li>\n Goods and Services Tax (GST):<\/strong> 9%<\/p>\n<\/li>\n<\/ul>\n A CIT Rebate and Cash Grant will be provided for Year of Assessment (YA) 2026:<\/p>\n CIT Rebate:<\/strong> 40% of tax payable<\/p>\n<\/li>\n Minimum Cash Grant:<\/strong> S$1,500<\/p>\n<\/li>\n Combined Cap:<\/strong> S$40,000<\/p>\n<\/li>\n<\/ul>\n Eligibility Conditions for Cash Grant:<\/strong><\/p>\n Company must be active (carrying on a trade or business, including investment holding activities)<\/p>\n<\/li>\n Must have employed at least one local employee (Singapore Citizen or Permanent Resident) in calendar year 2025, excluding shareholders who are also directors<\/p>\n<\/li>\n<\/ul>\n The rebate and grant will be automatically disbursed from Q2 2026. Loss-making companies that meet the local employee condition remain eligible for the cash grant. The reduced support levels reflect a shift towards more targeted measures.<\/p>\n The DDi scheme provides a 200% tax deduction for qualifying market expansion activities. Key enhancements apply to expenses incurred from YA 2027<\/strong> onwards:<\/p>\n Pre-approval cap raised:<\/strong> From S$150,000 to S$400,000<\/strong> per YA for qualifying activities.<\/p>\n<\/li>\n Expanded scope of automatic claims:<\/strong> Five of the seven activities previously requiring prior approval will now be covered under the automatic claim framework. Overseas trade offices<\/strong> and e-commerce campaigns<\/strong> remain subject to prior approval.<\/p>\n<\/li>\n<\/ul>\n The EIS will be enhanced for YA 2027 and YA 2028<\/strong> to encourage AI adoption:<\/p>\n New qualifying activity:<\/strong> AI-related expenditure will qualify for a 400% tax deduction<\/strong>.<\/p>\n<\/li>\n Expenditure cap:<\/strong> Up to S$50,000<\/strong> for qualifying AI expenditure.<\/p>\n<\/li>\n Partner institutions:<\/strong> Expanded to include the Sectoral AI Centre of Excellence for Manufacturing.<\/p>\n<\/li>\n No cash payout option:<\/strong> The S$50,000 AI expenditure cap is not eligible for conversion to a cash payout under the scheme.<\/p>\n<\/li>\n<\/ul>\n Several tax incentive schemes aimed at encouraging philanthropy have been extended:<\/p>\n 250% Tax Deduction for Qualifying Donations:<\/strong> Extended to 31 December 2029<\/strong> (from 31 December 2026).<\/p>\n<\/li>\n Corporate Volunteer Scheme (CVS):<\/strong> Extended to 31 December 2029<\/strong>.<\/p>\n<\/li>\n Not-for-Profit Organisation Tax Incentive (NPO TI):<\/strong> Extended to 31 December 2031<\/strong>.<\/p>\n<\/li>\n<\/ul>\n Global Trader Programme (GTP)<\/strong><\/p>\n Extended for five years to 31 December 2031<\/strong>.<\/p>\n<\/li>\n Qualifying commodities expanded to include Environmental Attribute Certificates (EACs)<\/strong> with effect from 13 February 2026, reinforcing Singapore\u2019s position as a hub for sustainability-linked trading.<\/p>\n<\/li>\n<\/ul>\n Finance and Treasury Centre (FTC) Incentive<\/strong><\/p>\n Extended for five years to 31 December 2031<\/strong>.<\/p>\n<\/li>\n Withholding tax (WHT) exemption expanded to cover interest-like borrowing costs<\/strong> (e.g., guarantee fees, finance fees) on payments made on or after 13 February 2026.<\/p>\n<\/li>\n<\/ul>\n A number of grant enhancements have been introduced to support SMEs and internationalisation:<\/p>\n Market Readiness Assistance (MRA) Grant:<\/strong><\/p>\n Support level increased to 70%<\/strong> of eligible costs from 1 April 2026 to 31 March 2029.<\/p>\n<\/li>\n The S$100,000 cap is extended.<\/p>\n<\/li>\n The \u201cnew-to-market\u201d condition will be removed in H2 2026.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n Business Adaptation Grant:<\/strong><\/p>\n Supports companies impacted by tariffs and supply chain disruptions.<\/p>\n<\/li>\n Up to 70% support for SMEs<\/strong> and 50% for non-SMEs<\/strong>, capped at S$100,000<\/strong>.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n Global Innovation Alliance (GIA):<\/strong><\/p>\n Enhanced with 70% funding for SMEs<\/strong> and 50% for local non-SMEs<\/strong>, capped at S$50,000.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n Enterprise Financing Scheme (EFS):<\/strong><\/p>\n Borrower group caps for SME Fixed Asset Loan and Trade Loans have been lifted, while maintaining the overall exposure limit of S$50 million per borrower group.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n Productivity Solutions Grant (PSG):<\/strong><\/p>\n Expanded to support a wider range of AI-enabled solutions<\/strong> for SMEs, with support of up to 50% of eligible costs, capped at S$30,000<\/strong>.<\/p>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n Key Eligibility Considerations:<\/strong><\/p>\n Local Shareholding:<\/strong> Most Enterprise Singapore grants require at least 30% ultimate individual shareholding by Singapore Citizens or Permanent Residents<\/strong>.<\/p>\n<\/li>\n SME Definition:<\/strong> Defined as group annual revenue \u2264 S$100 million or group size \u2264 200 employees.<\/p>\n<\/li>\n<\/ul>\n <\/p>\n Source:<\/strong> CPAA, 18 March 2026<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" This technical note outlines the key tax changes and, incentive scheme enhancements, and transfer pricing developments arising from Singapore\u2019s Budget 2026. 1. Direct Tax Rates Unchanged There are no changes to the prevailing tax rates: Corporate Income Tax (CIT): 17% Personal Income Tax: Top marginal rate of 24% on chargeable income above S$1 million Goods […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,13,9,8,6],"tags":[],"class_list":["post-2698","post","type-post","status-publish","format-standard","hentry","category-accounting","category-auditing","category-gst","category-incometax","category-techupdates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2698","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/comments?post=2698"}],"version-history":[{"count":2,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2698\/revisions"}],"predecessor-version":[{"id":2702,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/posts\/2698\/revisions\/2702"}],"wp:attachment":[{"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/media?parent=2698"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/categories?post=2698"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ehluar.com\/main\/wp-json\/wp\/v2\/tags?post=2698"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}2. Corporate Income Tax (CIT) Rebate and Cash Grant<\/h4>\n
\n
\n
3. Enhanced Double Deduction for Internationalisation (DDi) Scheme<\/h4>\n
\n
4. Enhancement of the Enterprise Innovation Scheme (EIS)<\/h4>\n
\n
5. Extension of Philanthropy-Related Tax Schemes<\/h4>\n
\n
6. Business Tax Incentives<\/h4>\n
\n
\n
7. Grants and Financing Schemes<\/h4>\n
\n
\n
\n
\n
\n
\n
\n